Heading towards the halfway point of the trading day, price action across the various asset classes was quite volatile, major indices erased their early highs after US House speaker Boehner cancels vote on the so-called republican ‘Plan B’ fiscal cliff tax bill due to a lack of support and plans no votes until after Christmas. This was followed by a prominent risk-off sentiment spreading across various asset classes as capital flows to the safe havens, with S&P 500 futures (-1.840%), USD index (+0.2%).
Underperformance is being observed in the Nikkei 225, led lower by the industrial sector (-0.77%). The index was weighed by the concerns over the fiscal cliff, piercing the 10,000 level.
In the currency market, given the general risk-off trade seen across the board, the safe-haven currencies like USD and JPY have strengthened in a flight to quality. Meanwhile, over in China, state news agency Xinhua reported that China is to make CNY more flexible to handle global quantitative easing, which indicates the CNY still has room to appreciate further. Regarding policy news, NDRC is to raise tobacco purchasing prices by average 10% in 2013.
Looking ahead, calendar remains light and we have Bank of Japan monthly economic report for December at 0500GMY/2300CST.
As of 0246 GMT:
ASX200 (-0.33 %), Nikkei 225 (-0.25%), Shanghai Comp. (-0.23%), Hang Seng (-0.76%), KOSPI (-0.88%)
21 Dec 2012 - 02:48 - Fixed Income Bank Speaker - Source: RANsquawk
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